NTFPS MARKETING SYSTEM

IN THE RAPTI HILLS OF

NEPAL:
A Linkage between Rural & urban and Highland and Lowland

A termpaper presented for partial fulfillment of the course Rural-Urban and Highland-lowland relations
Human and Natural Resource Studies, Kathmandu University

Prepared by
Shankar Prasad Gupta
Human and Natural Resource Centre
Kathmandu University
Kathmandu Nepal
2010

NTFPS MARKETING SYSTEM IN THE RAPTI

HILLS OF NEPAL:
A Linkage between Rural & urban and Highland and Lowland
Abstract
Non-timber forest products (NTFP), which include hundreds of traded and locally used forest products of
biological origin, employ millions of collectors, village traders and exporters in Nepal. Every year about
10,000 to 15,000 tons of more than 100 species of NTFPs are commercially harvested and traded from the
mid-hills and high mountains of Nepal (Edward 1996). The forestry share of the GDP is estimated at 15 %(
HMGN, 1989). The people in rural and uplands of Nepal live in and around forests are highly dependent on
to get a part of their livelihood from NTFPs.
The increasing commercial demand for the non- timber forest products found in Nepal presents an
economically and socially viable means of assisting hills/ mountain communities in controlling the
transition from subsistence to a cash economy. A number of recent national policy statements have
emphasized the potential role of NTFPs resources base in controlling to poverty alleviation, economic
growth and, occasionally, improved natural resources management.
Rapti hill of Nepal is the habitat of high value NTFPs. People inhabiting in these hills have traditionally
been collecting different NTFPs from private forests, community forests and government forests. Ther e are
several challenges and constraints in the marketing of collected NTFPs to increase the income and
employment opportunities for the forest dependent rural people.
It has been attempted to explore the existing markets of major tradable NTFPs with value chain
perspectives. This study has utilized method to examine the path through which NTFPs pass from
conservation, cultivation and harvesting to the final processor. The collectors are deprived of getting
actual prices of their products as the NTFPs market is trader dominated. There are several middlemen
associated with NTFPs marketing. The long and secretive marketing chain is inefficient and costly from
the perspective of collectors. There are various technical, economic, marketing, institutional and legal
obstacles in the cultivation and marketing of NTFPs in the region. The collectors' knowledge base about
the final price, final consumer and final destination of their products is very poor.
The study has attempted to explore the promotion of potential NTFPs, develop common facility centre,
organizing the NTFPs collectors, promotion of NTFPs based enterprises which can increase local and rural
income and employment opportunities in the region.

1. Background
The Kingdom of Nepal extends east to west for approximately 830km, a distance comprising
one third of the entire length of the Himalayan China. From north to south the country spans a
distance of just 200 km over which there are considerable altitudinal variations ranging from
70m above sea level to well over 8,000m at the northern crest line. Nepals varied and wide
range of topographic and climatic conditions give rise to a wide range of floral and faunal
variation including many different forest types [Dobremez, 1976; Shrestha, 1982; Numata,
1983; Kojima, 1985; Ohsawa et al., 1986 cited in Oslen, 1997]. About 5400 Vascular plants
have been reported in the country so far.
784 plant species have been identified with medicinal value [Bhattarai, 1997], and 238 species
are used in day-to-day livelihood whereas only 100 species are used for commercial purposes
[Bhattarai, 1997; AEC/ FNCCI, 2004; Subedi, 2006; Shrestha and Das, 2008]. Commercially
valuable NTFP species are those species which can be traded in Nepal and/ or India [Oslen,

1997]. Trading of NTFPs started with the harvesting of lichen in 1980s and other NTFPs have
been rapidly identified and commercialized thereafter [Bista and Webb, 2006].
About 85% of the total population inhabits the rural areas of Nepal [HMGN, 2002]. NTFPs
species make an important contribution to the livelihood of people in remote and mountainous
areas. In the remote and mountainous regions of Nepal, people collect wild edible plants for
daily consumption as food because of food deficit due to low agricultural production. People
also depend upon traditional medicines because the number of health posts and hospitals is
insufficient to address the health problems of people in remote and mountainous regions. The
knowledge of such medicinal plants has been developed, tested and adapted across
generations. Generally, this knowledge is transmitted orally and confined to a limited number
of people [Subedi, 2000]. Also, use of NTFPs and trade is traditional phenomenon in Nepal and
the rural poor in the hills since time immemorial have been involved in collection of NTFPs for
sale and household use.
A number of recent national policy statements have emphasized on the potential role of the
non- timber forest product resources base in contributing to poverty alleviation, economic
growth and occasionally, improved natural resources management (Olsen, 1997). Income
generation and off-farm employment in rural area are becoming as integral part of
development policy in Nepal. Promoting income generation from NTFPs and distributing the
income in an equitable manner is fundamental when many rural communities are dependent
on these products for their incomes (Edward, 1995).
NTFPs are plentiful in Nepal and trading of NTFPs species was found to be second most
important source of cash income at household levels [Subedi, 2006]. Accordingly, the majority
of the population is directly and/ or indirectly involved in collecting, selling and trading of
NTFP species. While there is evidence of overexploitation of economically valuable NTFPs
species in some accessible localities, other parts are still under-exploited and under-utilized
[Subedi and Bhattarai, 1998] so that there is still ample opportunity for local NTFPs species to
be managed for environmental benefits as well as enhancement of livelihood.
The studies attempts to explore the promotion of potential NTFPs, develop common facility
centre, organizing the NTFPs collectors, promotion of NTFPs based micro, small and medium
enterprises which can increase local and rural income and employment opportunities in the
region.

2. Statement of the problem

The average income in Nepal is low but many more opportunities and options for income
generation can be found in urban areas than in rural areas. Similarly, people residing in low
land [Tarai] have better options than the people living in the mountainous areas in terms of
agricultural production. They can harvest more than one crop annually, while the mountain
people of Nepal have to rely on more or less one crop per year. Irrigation facilities are also not
adequately available in these areas due to difficult terrain. Thus, agricultural production is
naturally low. To supplement the low agricultural production in the remote and mountainous
districts of Nepal, the Government of Nepal has given due consideration to NTFPs as an
effective means to enhance the economic benefits to rural people and to help in improving
livelihood, household food security and nutrition [Acharya and Subedi, 2004].
In Nepal, economically valuable NTFPs species such as medicinal plants have begun to receive
attention because of their potential to improve rural and mountainous livelihood and generate
cash income [Edwards and Bowen 1993]. Therefore, the Master Plan for Forestry Sector

[1988] and Tenth Five Year Plan of Nepal [2002-07] have given priority to NTFPs as an
important source of opportunities to generate employment for people living in the rural and
mountainous regions of Nepal.
Every year about 10,000 to 15,000 tons of NTFPs are harvested and traded from the natural
sites of the mid-hills and high mountains of Nepal (Edward 1996). The forestry share of the
GDP is estimated at 15 %( HMGN, 1989). The Nepal India trade in NTFPs represents 4% of
the total contribution of the forestry to the national economy (Edwards, 1996). The stated
facts show that rural people have been directly and indirectly involved in NTFPs business for
running their livelihood.
This study attempts to explore the existing markets of major tradable NTFPs with value chain
perspectives. This study will utilize method to examine the path through which NTFPs pass
from conservation, cultivation and harvesting to the final processor. Also overharvesting or
un-scientific and pre-mature harvesting has been observed due to the competition among the
collectors with consequences in declining the availability. The collectors are deprived of
getting actual prices of their products as the NTFPs market is trader dominated. There are
several middlemen associated with NTFPs marketing; these are Terai wholesalers, district
traders/ Terai suppliers, road-head traders, and village traders who are handling the products.
These intermediaries have strong network of marketing of NTFPs. The long and secretive
marketing chain is inefficient and costly from the perspective of collectors. The present market
chain does not provide equitable share of profits to the collectors. There are various technical,
economic, marketing, institutional and legal obstacles in the cultivation and marketing of
NTFPs in the region. The collectors' knowledge base about the final price, final consumer and
final destination of their products is very poor.

3. Objectives of the Study

To assess the actual and potential contribution of NTFPs to the livelihoods of rural
economy
To identify and analyze main market channels, marketing pattern and majors
constrains, along with marketing margins and profit distribution
To determine issues for intervention and further investigation / course of action to be
taken for an establishment of a better market

4. Rapti: Socio-economic conditions

The Rapti region comprises of 5 districts viz. Dang, Pyuthan, Salyan, Rukum and Rolpa. The
area is thinly populated and scattered all across the zone. The average size of the Household is
5.9. Agriculture, livestock and non-timber forest products particularly, the high value herbal
collection is the main stay of the people in this region. The region is r ich in biodiversity: an area
of high floral diversity, with distinctive vegetation, including many internationally traded plant species.
Many NTFPs are commercially traded as well as used for subsistence.
Cottage industry, offseason vegetable growing, goats and sheep raring for meat products are
some of the activities along the main trial in the region. Trade and industrial activities are very
limited. The region does not produce enough food grains to eat and as such, food grains have to
be fulfilled from terai districts annually by spending huge amount of money. Except for Dang
district, most of the districts in the region lacks motorable road network. Dang and Rukum
have fair weather Stoll airstrips, but the flights are limited and very much uncertain. Economic
activity in the region is limited therefore, it could not generate employment opportunity
throughout the year and as such, most of the economically active male population goes to

nearby Indian States for employment. The income thus earned is extremely important for
getting non-agricultural commodities including clothes to the family members.
Compared to the national average, the basic Human Development indicators show a poor
picture in region. Low female literacy, malnutrition, high poverty concentration is some of the
features of the region. The situation is worst particularly in Rukum and Rolpa districts. Even
the status of safe drinking water is way below the national average.
The real challenge in the mountain districts is that it does not have a dependable connectivity
with other districts except for seasonable newly developed roads. It takes days of walk to
reach a motor head. The cool climate, snow falling during winter, delays crop production and
the absence of any serious effort on the part of the government to increase local food
production has made the districts perpetually dependent from outside. Besides, the cool
climate of the district forces livestock to be moved in warm areas in other districts. Though the
status of the infrastructural and other socio-economic institutional facilities in regions has
improved in the last decade but it is still not easily available to the people. Still about 80% of
the people except Dang in the region have to walk more than half an hour to reach a health
post.

5. LITERATURE REVIEW
5.a What is NTFPs?
Forests are a major source for timber, fuelwood, fodder and non-timber forest products
[NTFPs] to the rural people for their subsistence livelihood and as an alternative source of
income. All forest products other than timber, fuel wood and animal fodder are regarded as
NTFPs. NTFPs are also known as minor forest products and non-wood forest products. In the
context of this study NTFPs are considered as all forest products other than timber, fuelwood
and fodder. NTFPs are mainly used for food and medicinal purposes and in both cases can be
used for domestic consumption and traded commercially.
Subedi (1999), tried to define NTFPs as all biological origin other than timber, fuel wood and
fodder from forest, grasslands or any land under similar use. The example of NTFPs includes
medicinal and aromatic plants, bamboo and rattans, nuts, fruits, tubers, berries, grasses and
leaves, resins, insect and insect providers, wild animals and birds. Chandrasekharan (1998)
presented a very similar definition, where she cited NTFPs as all goods and services for
commercial, industrial, or subsistence use derived forests and allies land uses, other than
timber, fuel wood and fodder. It also equates to the officially-used term minor forest
products.

5.b National Policy, rules and regulation on NTFPs

Several Policy and legal provision cover this sector, the important once are Master Plan for
Forestry Sectors (MPFS), Tenth five year Plan, Nepal conservation Strategy (1988), Nepal
Environment Policy and Action Plan (1993), CITES and Forest act and regulation. The NTFPs
regulation in Nepal emphasized on control in extraction, use, trade and Marketing. Some
species of NTFPs are banned for extraction, while other are banned for collection and some are
banned for export in crude form (HMG, 1995). According to Nepal (Gazette 2001), the
following 3 species have been banned totally concerning collection, transportation and export.
The species are Dactylorhiza hatagirea, Juglans regia and picrorhiza schophulariiflora. The
following 9 species have been banned for export without processing: Nardostachys grandiflora,
Rauywolfia serpentine, Cinnamomum glucensus, Valeriana jatamansii, Permalia species, Abies
stabilis, Taxus baccaca, Organic exudates and Cordiceps sinensis. As being a signatory, Nepal

honors the provisions set forth by convention on International Trade in Endangered Species of
wild Fauna and Flora (CITES). This has had only a limited effect in Nepal when a number of
species listed in its appendices were banned for collection and export. However, a real affect of
it is the lowering of the income for NTFPs products.
Permit system have been designed to regulate the collection, trade, processing and marketing
of NTFPs and to forbid collection of banned plant products. There are some formal procedures
that have to be fulfilled for collecting NTFPs from forests. However, it seems that the
concerned authority has not recognized the traditional rights to collectors to harvest NTFPs
and as a result collection is undertaken in all accessible forests and pasture. Although policy
has emphasized involvement of local people in the management of forests resources, but it
hardly seems to effect in reality due to implementation and monitoring capacity of the
concerned Authority. Depletion and overuse of the commercially exported species have been
reported in several studies in Nepal.
A number of recent national policy statements have emphasized the potential role of NTFPs
resources base in controlling to poverty alleviation, economic growth and, occasionally,
improved natural resources management (Olsen, 1996). Edward (1996) has categorized
Nepalese NTFPs into two groups, high valued products from high altitude (above 2000m) and
low valued products from lower altitude areas (below 2000m). High valued products include
medicinal and aromatic plants collected from high altitude pasture. Example includes Swertia
chirayita, rhizomes of Nardostachys grandiflora and roots of Picrorhiza scrophulariiflora are
harvested for trade to India. Low valued products collected from natural forests are traded in
large quantities in Nepal as well as in India. Examples, Cinnamomum tamala, bark fruits, and
seeds of Zanthophyllum aramatum and Sapindus mukorossi.
Policy is often designed at central level without adequate study and consultation at field level,
and is therefore not compatible with local context and peoples aspiration. Local peoples
participation in the policy making processes is negligible in Nepal, thus, local peoples
knowledge of local context and their practices are to be reflected in the policy. Further, a single
policy of NTFPs is not feasible for a country like Nepal, which has a wide range of geographical
and altitudinal variation. Therefore, there is further need for translation of policy statements
concerning the terms of utilizing economically valuable NTFPs species for betterment of the
livelihood of people in remote and rural locations into reality.

5.c Policy and Socio-economic issues hindering NTFP promotion

Some of the key issues and challenges associated with the NTFPs sector are presented below:

Policy, legal and regulatory issues:

Collection permits have to be obtained from the DFO for the collection of NTFPs from
government forest or in pastureland and from CFUGs for their collection from CF.
Transit/ export permits of unprocessed NTFPs have to be obtained from the DoF and
Department of Plant Resources (DPR) issues export permits for the processed products.
There is a ban on the collection of two high value species and on the export of eight NTFPs
without domestic processing.
Some NTFPs are restricted to collect and banned for exporting without processing legally.
However, in practice most of them have been collected and exported illegally. Government
is therefore loosing royalty and harvesting/ collection is becoming unsustainable,
threatening some important species with extinction. Many MAP species have more than
two local names for the same species in the forest rules 1995 with resulting different

royalty rates for the same species. Different royalty tates for the same commodities and
different MAPs are traded under fake names to avoid paying royalty.

Fiscal Policy issues:

The system of royalty fixation and collection is cumbersome and not justifiable. Public
consultation is usually ignored or avoided while fixing the rates and developing policy.
Different forms of formal as well as informal taxes are levied by various organsiations.
Sometimes up to 5 layers of taxation are in practice, i.e. government royalty, Local
government tax, VAT, service charge and the group. At the same time an additional export
tax on the value of the products should be paid. NFCCI issues a certicicate of origin while
exporting and charge a tax of 0.06% per certificate. As the Local Self Governance Act has
given authority to DDC and VDC on taxation, DDC imposes 10% tax to the collector to
export from the district. The mechanism for charging export tax on the value of the product
is not clear. Royalty rates of some species are higher than the market prices which force for
the illegal trading of the NTFP species.

Institutional Issues:

Most of the operational plans prepared by CFUGs do not reflect and encourage the effecive
manangement of NTFPs. Sufficient information of NTFPs - their distribution, status,
potential and harvestable amount, proper inventory and study of NTFPs is lacking. There
are many items which have not been identified scientifically like Tigedi, Banmula,
Consifa ko Bokra, etc. No appropriate method and season for collection has been
developed yet.
The present structure and capacity of the DoF is not adequate to work in this sector. The
DFO staffs are heavily burdened by work and are not well equipped to provide technical
advice to the communities and others on NTFPs. People involved in the regulation of NTFPs
have difficulties even in identifying them. Presently, the government has no clear policy for
managing the resources and limited capacity to monitor the status of NTFP's in those
inaccessible areas. The period for collection allowed after permission granted is very short
which is not sufficient for high altitude collectors.

Lack of appropriate Technical knowhow:

Local people as well as service providers have insufficient technical knowledge on

identification, cultivation, management and processing of NTFPs. Due to insufficient
knowledge and in some cases vested interest, collectors use technical operations during
harvesting which has the risk of over exploitation of the resources. There are no guidelines
and directives for NTFP management appropriate to local service providers and users.

Processing and local value addition:

Till now, most NTFPs products are exported from Nepal in a very crude and raw form in
bulk for which producers are getting a very low price and are paying high transportation
costs. At present, there are very few processing plants and very few have the skills for
processing high value NTFPs. Appropriate storage and preservation is also lacking, the
result is that value is lost.

Insufficient information and focus on NTFPs:

Although there is potential for NTFPs to generate income in a relatively short time and they
contribute to fulfilling the basic needs of local rural people, NTFPs are still considered byproducts of forest management, therefore, management is biased to timber species. Only a
few commercially extracted species like Lokta and Taxus baccata have detailed
management plan in some areas, particularly in the national forest areas, but still the
sustainability of extraction is in question.

Insufficient market information:

Lack of competitive markets and market information on existing valuable NTFPs is one of
the main constraints for NTFP promotion in the Mid-west region of Nepal. Local producers
and even traders don't have sufficient information on NTFP prices and market centres.
Because of information gaps producers / collectors are not getting the real price of the
commodity and are therefore reluctant to become involved in the NTFPs activities. Most of
NTFPs are exported to India unprocessed.
Most of the collectors are poor and live in isolated areas where illiteracy and poverty are
wide spread. Due to this and their lack of access to market information, they have little
bargaining power to negotiate for higher prices with intermediary traders. The price of
NTFPs fluctuates every year which acts as further discriminative to producers to invest in
the sector.

Socio economic and lack of investment capital for poor people:

Due to poor economic conditions, local people borrow money from local traders/ cotractors
or from moneylenders in the form or advances and pay it back by harvesting NTFPs at low
prices. This often takes place to make money available for key festivals. They have
limited/ no access to formal credit organisations that could provide soft loans to them. In
many cases, the wholesale traders issue money in advance and charge high interest rates
on the money loaned and then also purchse NTFPs at discount rates. This had a negative
impact on the resource side as well. To pay back the loan quickly, the collectors generally
harvest immature NTFPs hampering effective regeneration.
The present NTFP marketing system risks marginalizing people who cannot compete elite
and wealthy people in the marketplace. The system that does not promote efficiency with
an equitable structure of incentives leads to further marginalization of poor. Every time the
rich and elite have the chance to invest the capital in the marketing business.

6. Marketing of NTFPs
Marketing is the process of exporting potential customers and distributing the products at a
profit (Lecup, 1994). It provides a set of tools for people to efficiently add economic value to
the resources and products made of it. Marketing is vital not only to medium and large scale
industrial enterprise, but also in helping small family and forest communities to enable them
to switch to more sustainable and profitable enterprise from a subsistence economy.
There is a network of NTFPs marketing, comprising the various agents based at different
location of region, namely Dang, Surkhet, Bhairahawa, Nepalganj and kathmandu. This
network facility, NTFPs marketing go through different tiers from local collectors to the
exporters in the city areas. Local and road head traders are the key role players in the NTFPs
marketing because they have more information and knowledge about sources of NTFPs and
close relationship with collectors. Thus the collectors are often dependent on local traders or
middlemen to market their products.
There are four levels of intermediates between the source and the markets through which raw
materials are normally handed (Edward, 1996). They are village traders, road-head traders,
Terai trader and Indian traders; each handled progressively large volume of trade.
Current local trader: They bring products harvested from nearby forests and pastures to
village level trader levels and / or district level trader who stockpile the material and resell
it to Terai traders.
Terai Traders: The Terai traders often place orders for specific products with the district
traders or some to the areas directly to arrange the purchase of the products. The Terai
traders then supply the products to markets of India.
Indian traders: Indian wholesalers come from time to time to trading towns (Nepalganj,
Bhairahawa and Kathmandu). They have agreement with shopkeeper who, in turn, are in

touch with a network of village based trader and collectors throughout the less accessible
parts of the country. Several medicinal plant wholesalers use the same network of
middleman to buy material and sell them to their contacts in India and as well as abroad.
Subedi (1997) reported that the overseas exports of NTFPs from Nepal have principle
overseas trade with Belgium, France, United Kingdom, Canada, Hong Kong, Japan and
Singapore.
Figure 1: NTFPs marketing Channel

Individual
Collectors
(90%)

Village
traders

Road head
traders

Forest User
Groups
(10%)

Terai Whole seller/

Region trader

Aprox. 10% of total volume of trade

Processing Unit (10% of

Total Volume of trade)

Aprox. 90% of total volume of trade

Indian & overseas Market

Different studies have shown that the real collectors and producers are not getting the actual
value of their products and efforts. Most of the benefits go to the intermediaries and other
traders. One study (Edward, 1990) shows that the producers hardly get 10 % of the final prices
sold in India cities. The large number traders involved at different stages reduce the benefits to
the actual collectors and producers. Reaching to the real producer/ collectors and helping
them to benefit more is a big challenge. Collectors have poor access to credit. They have been
depending on village traders and it has resulted in NTFPs bring sold at low price as soon as
they collect. Therefore, only a small percentage of final prices go to the collectors.

7. Conclusions

NTFP is critical to subsistence at rural community level and contributing to the government
treasury, as well. The NTFP business sector has been known for generating employment at
local level, as well as creating multiplier effects down the value chain at different times and
spaces. A large number of poor people in the rural areas have been generating off-farm
employment opportunities through the collection and sale of NTFPs.
Trading of NTFPs species is basically operated by two actors: primary collectors and local
brokers. Local brokers had more bargaining power than primary collectors because they
lend the money to the primary collectors to buy food and other household necessities.
Furthermore, local brokers have more access to market information through business and
social networking so they usually try to reduce the price of NTFPs species to make more
profit
Marketing infrastructure (such as communication, storage, transportation facilities) in the
areas from where most of the NTFP originate, is very poorly developed. The local
harvesters and traders do not get reliable market information, and lack of access to
information results in inefficiencies, most often to the detriment of poor producers. The
market and trade channels of most of the NTFPs follow a general pattern of forest to village
to road head or local markets, then to larger regional trade centers (Terai based
Wholesalers) and/ or India).
Once the products reach the border they are generally sold and absorbed in India for uses
in manufacturing pharmaceutical and consumer products. Some of these products are then
exported out of India to foreign markets, but a large portion is consumed in India. India is
Nepals biggest market for medicinal and aromatic products.
Some aspects of the existing regulation are neither in favor of local harvesters nor effective
for the conservation of resources. Therefore, re-examine the ban on the unprocessed
export of the key NTFPs; Simplify export regulation, develop a clear process and criteria for
fixing and revision of royalty rates and implement the process.

8. Way forward
Provision of market information and micro credit program
In view of the weakness and the difficulties that the collectors and village traders face, the
collectors and the village traders sell NTFPs directly either to whole seller (in Terai and
Kathmandu) or to Indian traders. The proposed restructuring of the marketing system
would require the provision of an excellent market price information collection and
dissemination system simultaneously with the promotion of a group marketing system and
the provision of a micro-credit program, enabling the network members to borrow small
amounts of credit in time of need.
Improving indigenous technology with the provision of village based training
Provide training and conduct educational activities on NTFPs for extension workers and local
producers to improve their technical skills on in situ management, cultivation and harvesting.
Since local collectors and village traders are not allowed to export some of the NTFPs in
raw form, they need to be taught additional skills for processing these products. Additional
benefits will be acquired by improving indigenous processing and storage technologies.
This demands the provision of village-based training programs. Provision of training on
sustainable NTFP collection and management practices also has to be made for the
villagers. Without these institutional reforms and sustainable collection practices, villagers
will lose the opportunity to earn some cash income, as the stock of NTFP is gradually
dwindling in forest.

Institutionalization of market by establishing village-based cooperatives

Village based cooperation would be better options to provide mutual benefits for both
primary collectors and local brokers of NTFPs trading. Primary collectors can sale
economically valuable NTFPs species directly to the village-based cooperative, and local
broker of NTFPs can involve as a trade promoter of the NTFPs species under the villagebase cooperative. In this way, both actors of economically valuable NTFPs trading: primary
collectors and local broker would have win-win relation when village-base cooperative is
established.
Under the cooperative scheme, the village-based cooperatives would collect economically
valuable NTFPs species from every primary collector and store them in a warehouse. Later
on, the cooperatives would fix the price of every NTFPs species on the basis of the current
years market demand. Also The village-based cooperative could also provide soft loans to
the primary collectors when they need to buy food stuffs and other household necessities
so that they do not have to be dependent on local brokers to borrow money.
Cultivation of economically valuable NTFPs species on private land
The cultivation of economically valuable NTFPs species, the one NTFP species, one village
approach would be given priority. This promotes the conservation of all economically
valuable NTFPs species throughout all villages rather than cultivating single NTFPs species
in all villages. The cultivation of NTFPs species, which have high market demand, should
further be expanded into other private lands. However, it is necessary to ensure that there
is a market for these products.
Promotion forest certification for sustainable Marketing of NTFPs
Furthermore, there is a significant need in promoting forest certification in Nepal
sustainable Marketing of NTFPs. Forest Certification (FC) is a worldwide accepted concept
that advocates the reflectance of Sustainable Forest Management (SFM) and gives
assurance to forest products users. FC is a process that leads to the issuing of a certificate
by an independent party, which verifies that an area of forest is managed in a defined
standard, which aims to use market-based incentives to encourage SFM practices (MCE,
1998 and Forest and Trade Asia, 2007). In Nepal, 21 community forestry user groups
(CFUGs) are already formally awarded as certified CFUGs in 2005 under the principle and
criteria of Forest Stewardship Council (FSC), as a tool to promote sustainable forest
management (SFM) and responsible business practices focusing on non-timber forest
products (NTFPs).
Establishment of a Whole sale NTFPs Market
As much as it has been crucial for the establishment of a Whole sale Market. Wholesale
markets are an important component for the NTFP marketing. The planning of Wholesale
markets requires identification of a site that is appropriate in terms of size and in line with
the development of transport links to and within the urban area. In order for new markets
to be acceptable to market users, their planning must involve all stakeholders, including farmers, traders, transporters, retailers.

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